Courtaulds falls to Akzo Nobel bid

Courtaulds' plan to split itself into three sections as reported in April's PE(see page 9) was remarkably short-lived. Dutch conglomerate Akzo Nobel has stepped in with a £1.83billion bid which, after a fortnight of negotiations, was approved by the Courtaulds board.

Akzo Nobel plans to incorporate Courtaulds' coatings operations into its decorative paints division, which will restore it to the top of the world paints lead a position it lost when ICIbegan its acquisitive spree some two years ago.

Courtaulds' viscose and acrylic fibres operations currently deeply in the red owing to the turmoil in southeast Asia are also to be incorporated into Akzo Nobel. However, the enhanced fibres business thus created is slated for demerger; sometime before the end of the decade, according to Akzo Nobel, and probably with Courtaulds chief executive Gordon Campbell at the helm.

The other detail of the originally planned Courtaulds split the sale of the company's polymer products division is set to continue under the new ownership. The business makes products such as piping and toothpaste tubes.

Several companies approached Courtaulds after it announced its proposed split, including ICI, PPG, Sherwin-Williams and DuPont. However, it appears that none of these were prepared to bid for the whole company, baulking particularly at the prospect of taking on the fibres division.

The deal has been agreed by Courtaulds board, but still awaits approval by shareholders and competition authorities. Akzo Nobel says that it expects no trouble with the latter, although the new paints operation will hold a dominant position in the international aerospace coatings business.